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From Big to Biggest
With its November/December 2005 public offer yielding over N55 billion, Union Bank of Nigeria Plc, becomes Nigeria's most capitalised bank
By Udo Onyeka
Ebong, GMD, Union Bank Plc
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Determined to play a leading role in the post-consolidation era in Nigeria’s banking system and even beyond, Union Bank of Nigeria (UBN) Plc on November 23, 2005 offered for subscription 1,105,137,778 ordinary shares of 50 kobo each, at N20 per share. Knowing that the era would be for big players, the management of the bank, therefore, rolled out this offer as part of a long-term strategic plan designed to position the bank for a big role in the domestic market, as well as to enable it face global challenges of 21st century banking.
With over N55 billion raked in from the rights issue and public offer – and an initial capital base of approximately N55 billion – the cumulative shareholders fund of the bank now stands at N110 billion, proudly placing her in a position to play a dominant role in the sector.
In a statement made available to The Source, this latest feat represents over N15 billion above the target proceeds of N40 billion.
The Source equally gathered that the result revealed the rights issue as having been over-subscribed to the tune of 100.10 per cent, translating to an over-subscription of N17.143 million, which is above the initial target of about N18billion. Also, the public offer was 168.13 per cent subscribed, translating to an over-subscription of N15.1 billion, which is approximately 68 per cent above the initial target of N22 billion.
The UBN result further showed that a total of 239,703 applications for 1.858 billion ordinary shares were found to be valid and therefore accepted while for rights issue, a total of 67,404 applications, for 895.72 million ordinary shares were found to be valid and under the terms of the offer, accepted and processed accordingly.
In addition, 65,799 shareholders accepted their rights in full, totalling 517.68 million ordinary shares while 1,483 shareholders partially accepted their rights for 60.56 million ordinary shares.
With the large funds generated from the offer, UBN would no doubt be in good stead to tackle its pressing challenges which include acquisition and deployment of state-of-the-art technology, branch expansion and upgrade, recapitalisation of Union Bank UK Plc and increased working capital requirement.
The Source equally gathered that with a view to actualising the prospects of the new capital injection and maintain its lead in customer care, the management of the Bank organised a retreat recently.
It was, therefore, not surprising when UBN was announced winner of the Euro Money 2006 Award for Excellence as the Best Bank in Nigeria. This is remarkably the fifth time the Bank is winning global awards from reputable international magazines, having won the Bankers Award as Nigeria’s Best Bank four times in 2000, 2001, 2002 and 2004.
Also, the Bank is among the top 1,000 World Banks for 2006 as compiled by The Banker magazine, a member of the Financial Times Group of London.
Union Bank has, indeed, come a long way; established in 1917 as a colonial Bank with its first branch in Lagos, in 1925, Barclays Bank Dominion, Colonial and Overseas was formed to take over the activities of the Bank. In 1969, the Bank was legally incorporated in Nigeria as a wholly-owned subsidiary of Barclays Bank International Limited and remained Barclays Bank of Nigeria Limited. Its ownership structure remained unchanged until 1971 when 8.33 per cent of the Bank's shares were offered to Nigerians. In the same year, the bank was listed on the Nigeria Stock Exchange. As a result of the Nigerian Enterprises Promotion Decree of 1972, the Federal Government acquired 51.67 per cent of the bank's shares, which left Barclays Bank Plc London with only 40 per cent.
However, in 1979, Barclays Bank sold its shareholding in the bank to Nigerians. This resulted in the change of the bank's name from Barclays Bank of Nigeria Limited to Union Bank of Nigeria Limited, to reflect its new image and ownership structure. UBN is the first publicly quoted banking institution that is 100 per cent owned and wholly managed by Nigerians.
In 1986, it became the first bank in Nigeria to hit the one billion naira mark in savings deposit, and on March 31, 2004, its savings deposit of N65.7 billion was an industry record.
Rated the sixth biggest in Africa in 2003 by African Business magazine, having grown from one branch to a network of 302 branches and with staff strength of more than 6,833, the bank's growth is no doubt phenomenal.
According to the chairman of the bank, Professor Musa Gella Yakubu, “the management of the bank had long foreseen the inevitability of the universal banking system. It is because of universal banking system that UBN is diversifying into other financial sub-sectors. Currently, we have the following full-fledged subsidiaries: Union Homes Savings and Loan Limited, Union Merchant Bank Limited, Union Trustees Limited, Union Registrars Limited and UBN Property Company Limited.”
Apart from the above, The Source found out that the bank has controlling and or substantial shares in the following companies: Union Assurance Company Limited, Consolidated Discounts Limited, UTL Communications Services Limited, Union Stock Brokers Limited, Unique Ventures Capital Management Company Limited, Value Card Nigeria Plc and some others. |
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